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I couldn't completely finish this book (it had holds at the library) but I really want to check it out and finish it next time. It reminds me a lot of Malcolm Gladwell's books...
I love when a book can open up my mind to a new way of thinking. Nudge is a fantastic book that highlights the simple things in our life that can push us in one direction or another. With that knowledge we can make better choices about our health, our finances, and the world. The book provides suggestions for may areas of our lives, some work better than others, but overall the book is an eye-opener to how we do what we do.
Very dense but full of great knowledge and wisdom. Helped me understand why people think the way they think.
Slightly blandly written, and became of a bit a bore at times; but certainly interesting themes about human psychology and ways in which we make decisions.
I wish I could give it 4.5 stars. The logic was sound, the arguments were well supported, and the ideas were intuitive (some even innovative). Beyond that, it was a quick read, and was effective in "nudging" me to stop procrastinating on a few things. But as a teacher, I am aware of some unaddressed counterarguments to their points about school choice, which makes me wonder if some of their other arguments may have been less thorough than they seemed.
informative
slow-paced
I know they're economists, but I can't wait for the follow up "Nudge, for Parents". I don't think I'm very good at being a "choice architect".
Whenever you present choices to people, your presentation will affect their decisions. This book is about how choices can be presented to help those who are choosing to make the choices that are best for them.
The authors call this principle libertarian paternalism: libertarian because it is never compulsory, and paternalism because it guides people to make good choices. An example is the ordering of food in a cafeteria line, where placing healthier food first or at eye level may help the students who use the cafeteria to make healthier decisions.
The authors advocate for what they call "RECAP" (Record, Evaluate, Compare Alternative Prices) as an alternative to various situations in which the traditional mantra has been to Just Maximize Choices. RECAP essentially means that whenever people are required to make a complex financial decision (such as a selection of a retirement fund, college loan, or Medicare plan), they should be provided with a brief overview of the differences between the available options.
The first few chapters of this book mention many of the same studies mentioned in other books I've read recently. I like that it often puts them in lists, dedicating only a sentence or two to each. This format has the benefits of (1) not making me re-read lengthy descriptions of studies I've already encountered, and (2) helping to gather and synthesize ideas.
* Framing something in terms of losses prevented is more effective than framing it in terms of gains (37).
* Much as people who have difficulty saving money can earmark various amounts for categories such as rent and holiday shopping (using the planning part of their brain to resist in-the-moment-temptation of the acting part of their brain) people who do not spend much could benefit from earmarking some ahead of time for entertainment (allowing the acting part of their brain to relax because the entertainment was planned for ahead of time) (52).
* When one person in a group expresses a strong opinion and the members of that group are switched out over time, a new completely different group will still largely hold to that original opinion (57-8). In selecting which songs to download, people are strongly influenced by what songs others have downloaded before them, going back to the first few downloads in a system (62).
* Extended warranties are a waste of money but remain overpriced because there is no market incentive for them to decrease (80-2).
* Given n options to pick from (such as n types of candy or n investment funds), people will generally divide evenly between the options. If one fund is all stock and one is half-stock-half-bonds, they will generally select equal amounts of both funds. The same is true if one fund is all bonds and the other is half-stock-half-bonds, even though this means a very different underlying allocation (124-6).
* It's possible to get a mortgage in which the only payments are toward the interest (135). Some mortgages come with a "prepayment penalty" that prevents people from paying off their mortgages early (138). In general, the loan market has gotten sufficiently complicated to render outdated the Truth in Lending Act's stipulation that the APR be provided ahead of time to given people a sense of how risky their mortgage is (138-9). The whole industry would benefit from clearer choice architecture, such as requiring that all the fees and interest be presented summed together for each option (139-40).
* Sometimes greater transparency can help to solve problems on its own, without more forced regulation. Requiring companies to publicly disclose their hazardous waste statistics has made them compete to have less hazardous waste (192-3).
* If people could waive the right to sue for medical malpractice, health care costs would be lower owning to a combination of reduced litigation expenses and a reduced number of over-precautionary tests (209-11).
The authors call this principle libertarian paternalism: libertarian because it is never compulsory, and paternalism because it guides people to make good choices. An example is the ordering of food in a cafeteria line, where placing healthier food first or at eye level may help the students who use the cafeteria to make healthier decisions.
The authors advocate for what they call "RECAP" (Record, Evaluate, Compare Alternative Prices) as an alternative to various situations in which the traditional mantra has been to Just Maximize Choices. RECAP essentially means that whenever people are required to make a complex financial decision (such as a selection of a retirement fund, college loan, or Medicare plan), they should be provided with a brief overview of the differences between the available options.
The first few chapters of this book mention many of the same studies mentioned in other books I've read recently. I like that it often puts them in lists, dedicating only a sentence or two to each. This format has the benefits of (1) not making me re-read lengthy descriptions of studies I've already encountered, and (2) helping to gather and synthesize ideas.
Spoiler
* Framing something in terms of losses prevented is more effective than framing it in terms of gains (37).
* Much as people who have difficulty saving money can earmark various amounts for categories such as rent and holiday shopping (using the planning part of their brain to resist in-the-moment-temptation of the acting part of their brain) people who do not spend much could benefit from earmarking some ahead of time for entertainment (allowing the acting part of their brain to relax because the entertainment was planned for ahead of time) (52).
* When one person in a group expresses a strong opinion and the members of that group are switched out over time, a new completely different group will still largely hold to that original opinion (57-8). In selecting which songs to download, people are strongly influenced by what songs others have downloaded before them, going back to the first few downloads in a system (62).
* Extended warranties are a waste of money but remain overpriced because there is no market incentive for them to decrease (80-2).
* Given n options to pick from (such as n types of candy or n investment funds), people will generally divide evenly between the options. If one fund is all stock and one is half-stock-half-bonds, they will generally select equal amounts of both funds. The same is true if one fund is all bonds and the other is half-stock-half-bonds, even though this means a very different underlying allocation (124-6).
* It's possible to get a mortgage in which the only payments are toward the interest (135). Some mortgages come with a "prepayment penalty" that prevents people from paying off their mortgages early (138). In general, the loan market has gotten sufficiently complicated to render outdated the Truth in Lending Act's stipulation that the APR be provided ahead of time to given people a sense of how risky their mortgage is (138-9). The whole industry would benefit from clearer choice architecture, such as requiring that all the fees and interest be presented summed together for each option (139-40).
* Sometimes greater transparency can help to solve problems on its own, without more forced regulation. Requiring companies to publicly disclose their hazardous waste statistics has made them compete to have less hazardous waste (192-3).
* If people could waive the right to sue for medical malpractice, health care costs would be lower owning to a combination of reduced litigation expenses and a reduced number of over-precautionary tests (209-11).